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Tuesday, shares of On Holding AG (NYSE:ONON), the Swiss athletic footwear company with a market capitalization of $15.32 billion and currently trading at $47.85, are anticipated to trade higher following a reiteration of a Neutral rating and $65.00 price target by Citi analysts. According to InvestingPro analysis, the stock appears to be fairly valued based on its proprietary Fair Value model. The firm’s commentary highlighted the company’s fourth-quarter earnings per share (EPS) of CHF 0.33, which included an approximately CHF 0.12 foreign exchange revaluation benefit. This result significantly exceeded the consensus estimate of CHF 0.13, propelled by stronger-than-expected sales growth and gross margin expansion. InvestingPro data shows the company maintains impressive gross profit margins of 60.18% and holds more cash than debt on its balance sheet, demonstrating strong financial fundamentals.
On Holding’s sales surged by 36% compared to the consensus projection of a 33% increase, while the company’s gross margin improved by 170 basis points, surpassing the estimated improvement of 130 basis points. The analysts noted that the 41% constant currency (cc) sales growth marked a considerable acceleration from the third quarter’s 33% growth, driven by an exceptional 48% increase in direct-to-consumer (DTC) sales. Reported sales growth stood at 43%, again outperforming the consensus estimate of 39%.
Looking forward, On Holding has provided financial guidance for 2025, forecasting sales growth of 27%, which is above the consensus of 25% and market expectations in the mid-20% range. This aligns with InvestingPro’s analysis, which shows the company achieved 26.12% revenue growth in the last twelve months. Subscribers can access 14 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research reports. The company anticipates higher growth in the first half of the year, indicating sustained momentum. Despite gross margin and EBITDA guidance figures being slightly below consensus estimates—at 60.5% versus 61.0% for GM, and 17.0-17.5% versus 17.5% for EBITDA—these projections are likely to be seen as conservative considering the robust top-line momentum driven by DTC sales.
The report concluded with a positive outlook on On Holding’s global brand momentum, which continues to strengthen. This trend suggests potential upside to the company’s 2025 guidance and the possibility of achieving its 18.0% mid-term EBITDA margin target ahead of schedule, potentially as early as this year.
In other recent news, On Holding AG reported a notable 36% increase in revenue for the fourth quarter of fiscal year 2024, surpassing market expectations. The company’s gross margin improved by 168 basis points to 62.1%, exceeding both Raymond (NSE:RYMD) James and market forecasts. Analysts from Raymond James maintained a strong buy rating with a $68 price target, while UBS adjusted its price target to $65 but maintained a buy rating. Piper Sandler reiterated an Overweight rating with a $62 target, anticipating a slight beat in fourth-quarter performance, although they project a more conservative 2025 guidance.
Meanwhile, Truist Securities maintained a Buy rating with a $61 target, attributing recent stock pressure to unfavorable peer comparisons and concerns over sales data. KeyBanc Capital Markets raised its price target to $68, citing strong brand momentum and potential growth from product innovations like the Cloud 6. Despite some varied expectations for 2025, analysts generally express confidence in On Holding’s growth trajectory and brand strength. The company has consistently outperformed revenue expectations in previous quarters, adding to the optimistic outlook for future performance.
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